Page 135 - Cyber Defense eMagazine March 2024

Business Logic Errors

Business logic is the processes and protocols that determine how decisions are made and data is
exchanged. Errors are flaws or loopholes in the rules. Threat actors can take advantage of them to cause
unintended behavior, compromising others’ accounts or stealing funds.

Private Key Compromise

Threat actors can exploit a single missing line of code to give themselves administrative power over a
smart contract. Once they steal a developer’s or administrator’s private key, they can escalate their
privileges and drain others’ funds within minutes.

Solutions to DeFi Cybersecurity Challenges

Since some cybersecurity weaknesses are circumstantial, no one-size-fits-all solution to DeFi cyber
defense exists. However, platforms can improve their security posture.

1. Smart Contract Audits
A smart contract vulnerability can be as small as a bug — yet it can still drain users' funds. Routine
audits can identify security gaps and indicators of compromise, protecting platforms from
unintended, malicious actions.
2. Bug Bounties
DeFi platforms can post bug bounties — an offer of payment in exchange for service — to
encourage users to report vulnerabilities instead of exploiting them. Critical vulnerability
identification only costs an average of $1,000 for nearly 70% of companies. Most people would
enjoy supporting their decentralized ecosystem in exchange for cryptocurrency.
3. Decentralized Identities
Decentralized identities leverage cryptography to secure credentials and personal details. They
prevent threat actors from tampering with accounts while verifying users are who they say they
are. They help minimize the amount of malicious behavior on a DeFi platform.
4. Multifactor Authentication
Multifactor authentication prevents threat actors from accessing a user’s account even if they
steal credentials from an individual’s wallet. Experts claim it can prevent 50% of account takeover
attacks on its own. However, it’s best used in combination with other methods.

The Future of DeFi Cybersecurity

Since DeFi is still an emerging ecosystem, its continued existence relies on the amount of trust users are
willing to place in it. When cyberthreats drain people’s funds overnight, their faith in the system sharply
declines. Once they realize there is no recourse because they aren’t using a regulated, centralized
platform, they may choose never to return.

Cyber Defense eMagazine – March 2024 Edition 135
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